GrainCorp port gripe an old story

You can’t blame the farmers for using the $3 billion foreign takeover of
GrainCorp
to lobby for a break-up of the east Australian grains handler’s virtual ports monopoly. The looming change of ownership to American agribusiness Goliath
Archer Daniels Midland
feels like their last chance to have another poke at an old wound.

Throw in a looming federal election, a faint whiff of jingoism, and growers’ historical ability to punch above their weight politically and it’s obvious why they are bleating in
Wayne Swan
’s ear right now.

But as GrainCorp CEO
Alison Watkins
points out, the company’s ports are operating at less than a third of capacity, over 70 per cent of which is mopped up by other exporters, so it would be irrational for it to make life difficult for rival grain marketers.

GrainCorp is motivated by fees to allow others to use its facilities. The Australian Competition & Consumer Commission’s access regime is designed to ensure it gives fair port access on fair terms. Its takeover by a US company with no meaningful assets here will not change that.

That is not to say that there isn’t a regulatory bottleneck at most eastern ports, or question marks over GrainCorp’s visibility of others’ stocks, which will both demand attention from the watchdog.

But a strong argument would be needed to break up GrainCorp’s port assets, which would otherwise risk looking like a specious sop to growers.

It would also increase sovereign risk at a time when ANZ forecasts Australia will have to find $1 trillion to invest in farms in order to cash in on the Asian dining boom.